Speaking at Restaurant Magazine’s R200 summer event in London yesterday, Stenning said the eating out market is forecast to increase by 2.8 per cent in 2014 - the highest growth rate since ‘well before the recession’ .
However, he warned this growth would be ‘hard won’, with not all sectors of the market enjoying equal growth.
While the branded segment is forecast to grow 6.5 per cent in 2014, the total restaurant sector, which includes independents, is only due to increase by 1.7 per cent.
“The independent restaurant sector is still struggling. Consumers are switching into the branded market and are changing their behaviours to use branded restaurants much more frequently,” Stenning explained.
This pattern is expected to continue over the next three years, with Allegra forecasting growth for coffee shops, fine dining, fast food and branded restaurants and pubs and even tenanted and leased pubs, but further decline for independent restaurants.
In total, the UK restaurant market is set to reach £52bn by 2017.
According to Stenning, the biggest driver behind growth in the eating out sector has been an increase in spend, rather than eating out frequency, which is actually in decline.
Dinner in particular has seen ‘significant growth’ in average spend, he said. “Breakfast and lunch are still under pressure and yet dinner spend is increasing across the eating out market sectors, even in local independent restaurants, which have seen a 4.5 per cent increase in average spend.”
Stenning attributed this growth to a shift in consumer perceptions, with value no longer linked to price and customers prepared to pay for an experience which is ‘real, immersive, artisanal and engaging’.
“Consumers are spending as long as they are getting great value, and that is about experience and quality,” he explained.
Consumer willingness to spend more has been reflected in menu pricing, said Stenning, with operators pushing up exit prices as they “start to exploit consumers who are willing to spend a little bit more on an experiential occasion.”
According to the recently published Menu & Food Trends 2014 Report, average prices for main dishes increased 0.9 per cent in Q2 2014 compared to the same period last year, but exit prices for mains soared 4.6 per cent.
However, the move towards premiumisation has gone hand in with consumer desire for informality, as evidenced by the exponential growth of premium casual chains such as Loungers, Chimchanga, Bills, Wasabi, Ed’s Easy Diner and Côte, as well as the rising popularity of street food and the deformalisation of fine dining.
“Consumers are looking for great quality food, delivered fast. There is a drive towards all-day informality that is not tied down to a particular format or menu trend,” said Stenning.
He predicted that in 2014, ‘new fast food’ chains such as Leon, Five Guys and Roosters Piri Piri would lead the branded pack in terms of outlet percentage growth, while street food would continue to gather pace and bigger brands would hold their ground.
“The key message around premiumised informality driven by food pleasure seekers is that there is still significant room for growth in this market,” he said.
Launched in 2008 by Restaurant magazine, the R200 is the networking partnership of the top 200 restaurant group operators in the UK. Its programme focuses on those who have made a success of running a profitable restaurant business, with a number of events throughout the year.
During business briefings, keynote speakers cover areas such as market trends, innovation and business experience, and a yearly networking dinner with awards celebrate success in the multi-site sector.